Crypto Market Downturn: Retracement of Reversal?

On the bigger picture, the crypto market is on the rise. But the current market is beginning to go in the opposite direction, with the sellers dipping the market every time the price attempts to head higher.

Technically speaking, most cryptocurrencies have reached an area of Resistance after an overextended run to the upside. In fact, the cryptos that breached the Resistance levels shot right back down, leaving a wick on the top.

Based on the current price action, it is evident that the sellers have entered the market. But their period of existence in the market stands unclear at this point in time.

Every market goes through cycles. An uptrend being a sequence of higher highs, does have retracements along the way. But there are instances where a retracement turns into a downtrend, hence causing a reversal. Determining and differentiating a reversal comes from the understanding of market correlation and momentum of the underlying asset.

Currently, most currencies are trending to the downside on a smaller timeframe, depicting clues that the sellers are attempting to take over the market temporarily. The momentum of sellers the way down in most markets being weak is indeed an indication of the buyers holding control on the higher timeframe.

Crypto Market Price Update

Despite the shift in the direction of the market, the predominant trend remains untouched. The percentage returns of the top-performing cryptos have remained in the green in the last seven days, though there has been some deep pullback in prices.

Solana – this current market leader went to a retracement phase much before other cryptos, dropped up to 20% from its newly set all-time-highs. But within 48 hours of trading, the big bulls bought it right back up, taking the prices to another lifetime highs, as we speak. The ATH set on 21^st August has been breached, as the market trades at $83.65. But, Terra, correlating pair of Solana crypto, is consolidating at its support levels.

The followers, including cryptos like Cardano (ADA), Binance Coin (BNB), Bitcoin (BTC), Ethereum (ETH), etc., are also back to their technical Support levels for the second time. However, the fact that the higher lows of the uptrend maintaining grounds confirms the existence of buyers despite the extended dip in the market.

That being said, there are many other cryptos that are struggling to push the price to the upside, with the sellers pressuring the market to the downside. As mentioned earlier, every move by the buyers is being shot down by the sellers creating a lower high lower low sequence.

Solana Takes the Lead

In both technology and market performance, Solana token has been a leader lately. And the recent bull run in prices proves it all. It is one of the first cryptocurrencies to make a new ATH after the crackdown in May. Also, the momentum of the bulls keeps picking up every step of the way.

After breaching above its previous ATH of $58, the market set another ATH 40% higher. But the pace of the market slowed down ever since the breach above the all-time high. The profit-taking came in but was again being eaten up by the buyers, as the price recovered almost instantly after the dips.

But once reaching the $82 mark a week ago, a mini downtrend began in the SOL market. The buyers lost out of strength as the sellers kept making small sets of lower lows. In comparison, this downtrend came in exactly when the entire crypto market began to reverse its directions to the downside.

Interestingly, the market took Support at an unanticipated price of $65 and started to propel north. In fact, as of writing, it has broken above the recent highs, but the candles seem to be leaving wicks on the top.

Binance Coin Holds, but Buyers Unready

In the past two weeks or so, Binance Coin has been pumping significantly. Though it recently lost its spot against Cardano, the price action is attempting to surpass ADA. The BNB market, which is a blend of BTC, ETH, and ADA, has finally broken through the ever-lasting consolidating range. Besides, the market maintaining the momentum to date is clearly a bullish sign for the BNB market.

In the below-illustrated price chart of BNB, it is ascertained that the impulsive pushes from the buyers are getting stronger as the market is proceeding higher. The retracement after the first push was shallow, but the same got deeper on the second one. The initial attempt to make a higher high failed, as shown. The prices are now gradually dropping back to the Support, where the bulls are beginning to leave tails on the bottom of the candlesticks.

If the entire market begins to rise soon, then it is certain that the BNB market will head for another push like the previous one, taking the price to the next level of Resistance.

Given that the top-performing leading cryptos are not greatly affected by the current downturn, it is highly probable that the market will turn to the upside after the miniature sellers are done with their shorting opportunities.

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